Specialty Corn Brings Special Premiums

With grain prices depressed, more growers are counting on specialty crops to generate premiums. Some are high on high-oil corn to produce an extra 10-30 cents/bu.

High-oil corn, specifically Optimum high-oil corn (OHOC), is sold by about 60 seed companies using the Topcross (TC) Grain Production System from Optimum Quality Grains, at Des Moines, IA.

"There are more than 250 grain elevators across the Midwest that are now contracting for OHOC," says Frank DeGennaro, Optimum's vice president of operations. "Estimates are that acres planted to OHOC will grow to well over 1 million for 1999."

High-oil corn has an average oil content of 7.45%, compared to 3.5-4.5% for typical field corn. As a feed, the higher oil content provides increased energy for livestock.

Premiums are normally paid for oil percentages of 6% or above. In many contracts, 6%-oil corn generates a 10-cent premium. The premium increases by 1 cent for every one-tenth of 1% increase in oil, up to 30 cents at 8% oil.

Among those who have enjoyed up to 29-30-cent premiums by growing and marketing high-oil corn are Nebraskans Arlan Hostetler of Boelus, and Russell Svitak of Chapman. Another Nebraskan, Lynn Schluckebier of Seward, raised it in the past, but has switched to seed corn production.

"We had high-oil corn on about 15% of our corn acres last year," says Hostetler, who runs a corn-soybean rotation on his furrow-irrigated farm. He raised the specialty corn in '96, then again in '98 when his regional elevator offered contracts.

"We look for opportunities to go with alternative crops," says Hostetler. "The premiums offered for high-oil corn were definitely an incentive. In both years, we obtained up to a 7.9% oil content and a 29-cent premium."

Svitak farms with his father, Vernon. They grow corn and beans in a furrow and center-pivot irrigation program.

"We've had high-oil corn for three years," says Svitak, noting that last year's crop topped 350 acres. "Our premiums averaged 22 cents and oil content was just over 7%. Some numbers were as high as 8.8% oil."

Schluckebier grew high-oil in the mid-90s when contracts were offered in his area. "We received good premiums," he says. "I also fed it and saw good performance with our livestock."

When the contract was no longer available he switched to seed corn production.

"Like most people, we're looking for anything that will produce a profit," he says. "Our location is in one of the region's hotter areas for seed corn production. If there was a contract for high-oil corn, I would also look at that again."

"The average premium for growers in our program was 22 cents on 7.2% oil," says David Cook of the elevators' marketing division. "Most of the growers we've worked with have been happy with it and have an interest in expanding their acres."

Some of the corn handled by Peavey came from a local co-op and Continental Grain. Cook says his elevators aren't yet committed to '99 high-oil contracts, but may offer them in the future.

High-oil corn requires about the same production management as regular field corn.

"We used the same plant population, 31,000 seeds/acre, and a normal planting date," says Hostetler.

"One drawback is that you have to watch closely for hot spots in the bins due to the corn's stickiness. A positive aspect, however, is that when you clean out bins, they're nearly dust-free."

Hostetler's high-oil corn yields about 165 bu/acre, similar to conventional corn. Svitak says yields are in the 145-150 bu/acre range.

"It maybe performs just a little under normal corn," he says.

To determine which elevators are offering high-oil contracts, contact a local seed company or Optimum Quality Grains at 888-707-7648. Also, the Optimum Web site (www.oqg.com) offers a locator system. By entering a zip code, growers can get a list of contracting elevators within a 60-mile radius of the location.

"Our major contract acres are in Iowa, Illinois, Indiana and Minnesota," says DeGennaro. "However, we are contracting high-oil corn in more than 15 states."